The Financial Crisis: This Day—One Year Ago, Sept. 20, 2008
Talk about working weekends. This one takes the cake and all eyes are on Washington now...
Treasury Secretary Henry Paulson's gigantic yet sketchy financial rescue plan is going to Congress Saturday, according to reporting by John Harwood and Erin Burnett. Democrats have their collective eye on changes to the then-astounding $700-billion plan—including help for homeowners and a salary cap for CEOs.
If the plan is approved, the government could purchase as much as $700 billion in mortgage-related "toxic assets" from US firms. The Treasury is also floating the idea of having Wall Street asset managers oversee the toxic debt.
The participation of banks in the problem loan pool will be "primarily American" with some participation by US affiliates of foreign banks, Congressional leaders tell CNBC.
What You Were Reading:
- Democrats Seek Changes To Wall Street Bailout Plan
- Proposals for US Bad-Debt Fund
- Poll: Can Congress Pull It Off — in Time?
Congressional leaders have promised swift action on the bailout package but many details are still to be worked out.
Sen. Charles Schumer (D-NY), chairman of Congress' Joint Economic Committee, says the government plan is a good start but doesn't go far enough.
"But it includes no visible protection for taxpayers or homeowners," says Schumer. "We look forward to talking to Treasury to see what, if anything, they have in mind in these two areas," he said.
Schumer adds that legislators hope to pass the plan this coming week. "The aim is to get this on the president's desk by Friday," Schumer says at a news conference.
The Treasury and Federal Reserve have already put nearly $1 trillion of taxpayer money on the line to help credit flows.
On the corporate front, a US bankruptcy judge approved U.K. bank Barclays' deal to purchase the core US business of Lehman Brothers.
And Morgan Stanley's board is expected to meet over the weekend to discuss a merger with Wachovia, The Wall Street Journal reports.
A deal could include sovereign wealth fund China Investment Corp. taking a significant stake in the combined company. But CIC's interest may be contingent on Wachovia being able to offload some of its mortgage assets, the report said.
The Present Day: